I started to write a slightly snarky response wondering if Cowen had been more efficient writing the more recent piece because he had better technology and 16 years of thinking about it to back him up or if he was subject to cost disease because it took just as long to write four or five as it did back in 1996, inflation has made his time more expensive and he had to distill down 16 years more experience into a thoughtful entry.

At that point it occurred to me that every time people talk about cost disease related to the arts, they do it in connection with the actual performance. Other parts of creating art has actually benefited from greater efficiencies. Computers aid the design of performance elements as well the transmission and discussion of those designs allowing them to be received and acted upon much quicker than in the past. The marketing and advertising of the performances are likewise aided by technology in terms of design and dissemination. LED lights promise to cut electricity bills by an enormous amount once the ability to control and insure the quality of the light improves.

The quality of the performance itself also has much more potential of benefiting from technology in terms of the amount of research the performers, directors, choreographers, conductors, etc can do in preparation. Every aspect of the performance can be informed by concepts promulgated half the world away. In many respects, the audience is getting a much better product than they were years ago and it is made possible less expensively than in the past.

In fact, they are in a position of being far more informed about a performance they are about to see than a person with the same level of experience with the arts 10 years ago might have. Of course, the whole issue we have is whether the audience values that experience or not.

Had Cowen used this approach in support of his argument that the arts aren’t really impacted by cost disease, I might have been a little more receptive to it.

In some respects, I think that non-profit performing arts have done a great job of employing technology to keep their costs under control, (often to the detriment of the artists, orchestra musicians in particular these days), in comparison with the movie industry where technology has resulted in sky rocketing costs. They employ wide spread distribution options like movie theatres, DVDs and streaming as a substitute for economizing.

It is often said there is a lesson in that for the performing arts but just like the independent film maker, the small arts organization would have to depend on a relationship with a big company with the resources to replicate something on the scale of the Metropolitan Opera and National Theatre broadcasts.

Of course, many times audiences demand the spectacle that technology brings to the movies and some of that carries over to even the solo artists that Silpayamanant mentions. While touring solo might have been a cost cutting measure at one time, that often isn’t the case any more with the huge tours many major acts take on the road.

As an aside, I wonder at the economics of J-Pop groups like AKB48 which has 66 active members spread out across four performing teams. Even though they don’t tour, that is a lot of people to support.

But getting back to the discussion of Baumol’s cost disease, even though people cite the fact it still takes as long to perform a particular work as it did X hundred years ago, it probably really isn’t those two hours of performance that is the costliest part of the process, it is everything else that surrounds it. Because of audience expectations about their experience more preparation precedes the performance, much of which involves salaries and benefits.

As I noted above, technology has brought efficiencies and quality to many parts of the preparatory process. What is it coming down to now is balancing the expectations about the quality of the experience and the cost of delivering it with what people are willing to pay. Right now the focus seems to be on how much of the product can be trimmed back before people notice and become concerned with the drop in what they value.

While this is translating into seeing how many musicians an orchestra can cut before people figure the music is suffering, you see the same thing manifesting in other areas of your life as well. Just try to buy a half gallon of ice cream these days. You will find it is 1.75, maybe 1.5 quarts.

I don’t think that is really a sustainable practice. There should be an corresponding push to shift customer expectations too, and not toward accepting less ice cream and music for the same price, but rather expecting a slightly different sort of experience surrounding a quality performance. I am not sure exactly what it would look like. I know I would like it to be less structured and more educational than what we have now.

2. I do not see the arts as subject to the cost disease very much at all. As for the “live performing arts,” the disease seems to afflict the older and less innovative sectors, such as opera and the symphony. There is plenty of live music these days, it is offered in innovative ways, and much of it is free.

I was a little confused by this point since all it really proves is that people aren’t charging for live music and doesn’t really address that there are costs involved with the performance.

“4. In many sectors of the arts, especially music, consumers demand constant turnover of product. Old music becomes “obsolete” — for whatever sociological reasons — and in this sense the sector is creating lots of new value every year. From an “objectivist” point of view they are still strumming guitars with the same speed, but from a subjectivist point of view — the relevant one for the economist – they are remarkably innovative all the time in the battle against obsolescence. A lot of the cost disease argument is actually an aesthetic objection that the art forms which have already peaked — such as Mozart — sometimes have a hard time holding their ground in terms of cost and innovation.”

I will grant him that some of the cost disease problems can be attributed to an adherence to aesthetic ideals rooted in the past and a resistance to innovation.

But I am not sure if consumers are truly demanding a constant turnover in product. There is reluctance to sample anything new and unfamiliar among consumers. This isn’t necessarily confined to symphony and opera where you might argue the new material is being presented to the wrong audiences (i.e. older existing audiences whose tastes are already set).

There is as much a sense of risk aversion among audience as among content creators. Broadway shows are often revivals or derivative of works that have already proven their success. Playwrights bemoan the fact that regardless of their proximity to Broadway, few theatres are producing new works.

The same is true with movies. The most well attended movies this summer were based on comic books. Even the plots of those stories had been revamped numerous times in the comics format. The plan for the adaptation of J.R.R. Tolkien’s The Hobbit went from two movies to three leaving fans to wonder, if the three books of the Lord of the Rings took three movies to tell, (albeit with much left out), how is the one book of The Hobbit going to be stretched to three?

A fair bit of emotion and nostalgia is responsible for perpetuating the conditions which contribute to Baumol’s cost disease. One of the points Cowen makes reinforces this:

“Live music” may seem like it doesn’t change much, but lifting the embargo on Cuba would boost the quantity and quality of my consumption of spectacular concert experiences, as would a non-stop flight to Haiti.

Opportunity rather than innovation is the only thing having any bearing on the quantity and quality of his consumption. It isn’t necessary for Cuban musicians to made any changes whatsoever since 1962 when the embargo began, they just need to be available.

There is an element of his aforementioned “aesthetic objection that the art forms…have already peaked” in this point as well. It is difficult to take an entirely objective view of a product or service possessing an artistic element.

If quality of product could be maintained by paring down performers and replacing them with technology, The White Stripes would have been a model everyone emulated. As interesting as the band’s work might have been, there wasn’t a rush to form duo performance groups.

It may be a difficult to define Platonic ideal, but there is a minimum one can offer before the perception of the experience suffers. Ultimately, because it is his area of expertise, I might find myself having to concede Cowen’s point in the face of a more detailed argument. But I think given that the resources necessary to provide the central experience remain generally constant, Baumol’s cost disease does indeed impact the arts significantly.

As for the solution, at this point I keep coming back to Jon Silpayamanant’s idea that ancillary elements surrounding the experience need to be developed in order to support it.

One option for preserving the performing arts is often mentioned is a greater use of multi-media either in a performance or as a medium to transmit the performance. However, reading an article on Time magazine’s website (h/t Tyler Cowen, Marginal Revolution) about how it is more difficult to remember things you read in electronic format versus paper format, I wondered if moving to electronic media might be a disservice to the arts.

Second, the book readers seemed to digest the material more fully. Garland explains that when you recall something, you either “know” it and it just “comes to you” — without necessarily consciously recalling the context in which you learned it — or you “remember” it by cuing yourself about that context and then arriving at the answer. “Knowing” is better because you can recall the important facts faster and seemingly effortlessly.

“What we found was that people on paper started to ‘know’ the material more quickly over the passage of time,” says Garland. “It took longer and [required] more repeated testing to get into that knowing state [with the computer reading, but] eventually the people who did it on the computer caught up with the people who [were reading] on paper.”

The thought is that spatial context is very valuable in helping us to remember things. We recall where places are physically located based on landmarks. Though it may seem hard to believe it can be that significant a factor, we are better able remember information because we have a sense of where it appeared on a page. E-books don’t have that sort of physical context.

In addition, apparently size matters as well.

“He says that studies show that smaller screens also make material less memorable. “The bigger the screen, the more people can remember and the smaller, the less they can remember,” he says. “The most dramatic example is reading from mobile phones. [You] lose almost all context.”

Based on these findings I wondered if the arts might actually seem less relevant if digital media was the only way to access it. While a performance obviously loses its impact when it is not seen live, it may quite literally be less memorable when viewed on a smaller screen as well.

I would be interested to learn if there are studies comparing the experiences of people who watched a movie in a theatre vs. on a television vs. a small screen. (I am sure movies watched on airplane seatback screens will be memorable or forgettable due to myriad factors other than screen size 😉 )

Will movies seen on a very small screen be less memorable because the distances between people and things are so compacted? Desperate lunges to save someone may make less of an impression when reduced to fractions of an inch. Panoramic shots of gorgeous landscapes may pass by unnoticed in small scale.

Digital media may increase your reach by giving you access to a larger distribution channel, but if the scale makes it difficult to distinguish your product from thousands of others, you may have to question its worth.

You may basically be in the position you are now with YouTube where everyone posts something in the hopes it goes viral. I am sure YouTube won’t always be the standard, but if you can use it to test things now. Watch a video on the largest computer screen you can find and then watch the same one on a cell phone screen and judge the effectiveness. Better yet, watch the smaller version first and then watch the larger and see how much you may have missed just in terms of emotional expression.

On the Marginal Revolution blog, Tyler Cowen has a short post about a psychology professor who requires his students take turns bringing a homemade snack in to each class. If they don’t bring in a snack, he doesn’t teach. I was initially pretty cynical about this approach as a valid teaching technique and was surprised to learn he had actually been doing it for over 30 years before it became an issue.

While I was still a little cynical after reading about his rationale for the requirement, I could understand how it fits into a psychology class that runs 3 hours at a stretch.

Parrott said that he’s teaching students to work together to set a schedule, to work in teams to get something done, and to check up on one another, since everyone depends on whoever has the duty of bringing snacks on a given week. Typically, no individual should be involved in preparing the snack more than twice a semester, he said.

Parrott said that considerable research shows that students learn more if they develop the skills to work in teams, to assume responsibility for projects, and get to know their fellow students. Team members need to count on one another, he said, and his students learned Thursday that if someone fails at a task for the team, there are consequences. “They need to learn to check on one another and clearly they didn’t get that done,” he said. “This was an important lesson.”

It struck me that this might be a good approach for building/engaging community around an arts organization (with the punitive elements de-emphasized, of course.) An arts organization might have a performance/gallery series where attendees were required to bring food as payment. Some times it might be the orange ticket holders, other times the blue ticket holders, so that an attendee isn’t bringing food for the whole audience every time they attend.

Allowing for a snack period like this will change the dynamics of the relationship with the audience. It isn’t going to pay the light bill, but it can get people involved and invested enough in the organization in other programs that do earn revenue and donations. I suspect the staff will do a much more effective job of convincing people their organization is worthy of support while chatting over chocolate chip cookies than pitching them during a curtain speech.

I can envision scenarios where groups bond over their shared responsibility to provide snacks to try to outdo the other groups. If that turns into its own type of headache and introduces stress to an event intended to be informal, that impulse could be channeled to support a more formal series of events to increase the investment in its success.

About the Author

When I was a teenager if anyone had told me that I would be excited to share information about contract law, marketing, human resources, grant writing and the philosophy behind ticket pricing, I would have laughed...and laughed. But there is such a dearth of this information applicable to the needs of non-profit arts organizations that I do get excited when I see the opportunity to discuss these topics....read more